Is there automobile insurance coverage for an STI contracted during car sex?
The answer may not be as clear as the headlines have portrayed.
On June 7, 2022, a Missouri Court of Appeals affirmed a $5.2 million judgment award in favor of a woman who contracted a sexually-transmitted infection after having sexual intercourse with a man who owned a car insured by GEICO. The decision made national news, with some of the headlines conflating the holding with a determination that GEICO must pay the woman $5.2 million. A holding that an automobile insurance policy covers damages arising from sexual activity should understandably concern insurers and create unforeseen exposure, but despite misleading headlines, that is not what a court has ruled, . . . at least not yet.
The litigation stems from a romantic relationship during which a woman apparently contracted a sexually-transmitted infection from her partner after engaging in unprotected sexual activity in his parked car, among other places. Upon learning that GEICO had issued an automobile insurance policy to her partner affording coverage with respect to the vehicle, the woman demanded GEICO pay her $1 million to resolve her claims for negligence and negligent infliction of emotional distress. GEICO denied the claim and, on April 7, 2021, filed a federal lawsuit seeking a judicial declaration that it had no coverage obligations for the woman’s liability claims.
Meanwhile, the woman proceeded with her claims against her former partner and the two agreed to arbitrate and limit recovery to the former partner’s applicable insurance limits, as permitted by Missouri statute. On May 24, 2021, the arbitrator awarded $5.2 million as damages, determining the former partner was liable because the sexual activity in his car “directly caused, or directly contributed to caus[ing]” the woman to contract the STI, and that $5.2 million was “an amount that would fairly and justly compensate” her. Once the woman moved for a state trial court to confirm the arbitration award and reduce it to judgment, GEICO sought to intervene and challenge it. The state trial court adopted and incorporated the findings and conclusions of the arbitration award and entered judgment in favor of the woman. After doing so, it then granted GEICO’s motion to intervene. GEICO filed an appeal, complaining about the timing of the trial court’s confirmation vis-à-vis its intervention.
The issue before the appellate court was whether the trial court acted in contravention of state statutes and state and federal constitutional provisions by confirming the arbitration award without giving GEICO an opportunity to develop facts and arguments. The court found no error, explaining that GEICO, a non-party to the dispute, was only entitled to notice of the arbitration prior to judgment but had no right to relitigate liability and damages since those issues had already been determined by an arbitrator at the time of GEICO’s intervention and because none of the parties had asserted any grounds for vacating, modifying or correcting the award. The court also rejected any claim of constitutional infirmity since GEICO could have defended its insured against the woman’s claims and because it had instituted a declaratory judgment action to determine its coverage obligations in federal court, which the court deemed “yet another forum in which GEICO may defend its interests.”
Importantly, then, the appellate court has not considered (or decided) whether GEICO’s policy covers the $5.2 million award. That issue will be decided in GEICO’s pending federal lawsuit. In that action, GEICO’s argument is simple: Its policy should not be deemed to afford coverage since the policy language states the policy only covers damages “arising out of the ownership, maintenance or use of the owned auto or a non-owned auto.” GEICO contends, and has sought a summary judgment determination on the basis that, this language is not satisfied if an automobile is merely the situs of an injury and if the injury does not arise out of the “normal” use of an automobile. GEICO’s argument is supported by ample case law from various jurisdictions, although there may be potential room for argument, particularly in certain jurisdictions, concerning what constitutes “normal use” and whether an injury “arises out of” such use. GEICO may have the better argument and the one that comports with what may likely be one’s reasonable expectation about what an automobile insurance policy will and will not cover.
Nevertheless, to curb against this potential creative exploitation by plaintiffs, insurers can certainly consider adding additional endorsements to their policies that further define and qualify available coverage so as to enumerate the permissible uses of a vehicle (i.e., actively driving, parking, transporting, etc.), as well as more explicitly defining the requisite “arising out of” relationship between such permissible uses and any ensuing injury (e.g., explaining that any ensuing injury must be caused by such use as opposed to a separate act wholly disassociated from and unrelated to the use). Such endorsements could very well deter claimants from asserting novel coverage arguments for claims that were never intended to be covered, and may cause claimants and insureds to think twice before entering into consent judgments or agreeing to pursue insurers for these kinds of claims in the first place.
Daniel C. Shatz is a Miami partner with the U.S. law firm of Hinshaw & Culbertson LLP. He represents clients in complex business and insurance coverage disputes at all stages of litigation and may be reached at: dshatz@hinshawlaw.com.
Timothy W. Odzer is a Miami associate at Hinshaw. He is a litigator who represents clients in business and insurance coverage disputes and assists clients throughout all phases of dispute resolution.
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